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Does this face look scary to you?

That caption caught my attention, as did the picture of the adorable little girl with the purple bow in her hair. Her face was scarred and her right eye was covered with a bandage, but she was attempting a smile.

The picture of the little girl, Victoria Wilcher, was making the rounds on the internet along with an unbelievable story. The little girl's grandmother, Kelly Mullins, posted the picture on Facebook after she claimed that an employee at a Kentucky Fried Chicken franchise asked the pair to leave because Victoria's injuries were scaring customers. Victoria had suffered broken bones to her face and lost her right eye and movement on the right side of her face after three of her grandfather's ten pit bulls attacked her at her grandfather's home (the grandfather and his girlfriend were charged in the attack). After the incident at KFC, the little girl cried the whole way home from the restaurant, according to Mullins. For days afterwards, she didn't want to look in a mirror.

Folks across the country were outraged that such a terrible thing could happen to a little girl. Donations poured into a GoFundMe donation page raising thousands of dollars for Victoria's medicare care. A plastic surgeon, Dr. Frank Stile of Las Vegas, even flew out to meet Victoria and offered free help to reconstruct her face and Raymond Peters, the owner of the Center for Custom Prosthetics in Florida, offered to donate a prosthetic eye. Kentucky Fried Chicken, at the center of the controversy, issued an apology, pledged $30,000 towards Victoria's medical bills and promised to investigate "as this kind of hurtful and disrespectful action would not be tolerated by KFC."

It was a happy ending to a tragic story.

Except for one thing: that investigation from KFC? The restaurant couldn't find any evidence to support the allegations made by Mullins. They launched a second investigation, this time by an independent investigator. Their findings?

Neither revealed any evidence that the incident occurred, and we consider the investigation closed.

That, from KFC spokesman Rick Maynard. Maynard added:

We are honoring our commitment to make a $30,000 donation to assist with Victoria’s medical bills. We hope everyone keeps Victoria in their thoughts and prayers. She will certainly be in ours.

The family continued to maintain that the story really happened, even posting on their Facebook page, "I promise it's not a hoax." That page, Victoria's Victories, has been taken down (it was still live as of yesterday). The GoFundMe page has also been removed while the company is investigating.

The alleged encounter at KFC happened, according to Mullins on May 15, but the photo and story didn't appear on Facebook until June 12. Mullins blames doctor's appointments for the month-long delay even though updates including this one, posted the day after the alleged incident: "We had a small adventure yesterday, Victoria pulled her feeding tube out but thanks to the great people at Batson Children's Hospital she is home today waiting for her new sister! Mom & Baby Abby come home today too!!" A subsequent post a few days later indicated that the family was experiencing trouble paying for medical bills and asked for donations to pay for formula for a feeding pump; no mention was made of any visit to KFC.

The KFC franchise where the incident was said to happen hasn't been open for years: Mullins said she was confused about the location.

Mullins revised her story to say that the confrontation happened at a different KFC: neither video surveillance nor employee interviews at two other locations supported that story.

Mullins said that she ordered sweet tea and mashed potatoes to feed to Victoria. The local paper reported that pulled receipt tapes indicate that no orders included mashed potatoes and sweet tea on the same transaction, or as part of a larger order, on that day.

The story made the rounds on the internet and on TV, including mentions on CNN's Nancy Grace and NBC's The Today Show. Donations for Victoria's medical care exploded: prior to posting the story, the GoFundMe site had raised less than $1,000 while after the posting, it climbed to $135,000.

As more details emerged, however, it appeared that the story may have been made up, making many donors grew angry. As of yesterday, there were nearly 5,000 comments on the Victoria's Victories Facebook post where the family denied that the story was a hoax. Others started competing Facebook pages, labeling the story a hoax. Still others took to the local newspaper website to voice their anger. Many who had given money demanded to know how the money might be used and what would happen to their charitable donations.

Only that's a loaded term.

The spirit of those gifts might have been charitable - but make no mistake, those were not charitable donations. Those were simply gifts.

Donations to an individual for any purpose - even medical care - are not tax deductible. Similarly, donations to a fund to benefit an individual for any purposes - even medical care - are not tax deductible.

For federal income tax purposes, charitable donations are those that benefit a qualified charitable organization; to be charitable, an organization generally has to benefit a class of persons, not an individual. That's why charities that don't qualify as private foundations (think Pew or Annenberg) are often referred to as public charities. The Internal Revenue Service characterizes public charities as those that:

A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family...

If you're not sure whether an organization is a qualified organization for tax-exempt purposes, you can ask to see their documentation from IRS - or check directly with IRS using Select Check.

If you give money out of the kindness of your heart to an individual or group for a good cause, you may get warm fuzzies but you won't get a deduction for federal income tax purposes. What you've done, for federal income tax purposes, is make a gift. You don't get a federal income tax deduction for gifts that aren't charitable - but you could have a gift tax consequence.

Transfers of property in exchange for nothing (or less than full value) are subject to federal gift tax if they exceed the annual exclusion. For 2014, that amount is $14,000 per person. There is no limit to the number of people that you can make gifts to without triggering federal gift tax: it makes no difference if you give $14,000 to one person or to one million people. Gifts in excess of the annual exclusion are subject to the federal gift tax.

You may not realize that the federal gift tax is payable by the person making the gift, not the recipient. Victoria's family will not have any federal gift tax consequences as a result of donations from GoFundMe or from the generosity of KFC or those doctors. However, individual donors who make gifts in excess of $14,000 may have a gift tax consequence.

What about income tax consequences? We've already established that there's no deduction to the person making the gift. But what about the recipient? With a cash or cash equivalent gift, there is no federal income tax consequence to the recipient. Cash gifts include checks and payments received through third party processors like GoFundMe. Victoria's family has no obligation to report any gifts - cash or otherwise - to the IRS come next April.

Mullins’ attorney, Bill Kellum of Jackson, has indicated that he is trying to create a trust for Victoria's continued care: would that change the analysis? Not at all. Under section 2511(a) of the Tax Code, "the tax imposed by section 2501 shall apply whether the transfer is in trust or otherwise."

What if those donations were made directly to the hospital for Victoria's care? Those donations would be exempt from federal gift tax under section 2503(e)(2) which excludes transfers "to any person who provides medical care (as defined in section 213 (d)) with respect to such individual as payment for such medical care." It would not affect the income tax consequences.

But isn't there some exclusion for providing medical care under the income tax rules? Expenses for medical care are only deductible for the taxpayer, the taxpayer’s spouse and the taxpayer’s dependents. That means that outside of those legally responsible for Victoria's care (it's unclear who that is since her parents are not mentioned in any of the stories), anyone who pays for her medical care would not be entitled to a deduction.

So does that mean that whoever claims her as a dependent can deduct medical expenses paid out of the GoFundMe fund or other gifts? Maybe. If those expenses were properly deductible as medical expenses on a Schedule A if paid out of pocket, they are deductible if paid for by money donated for that care.

What if that money is used for other purposes? Well, clearly if it's not used for medical care, there's no deduction for medical expenses. But that doesn't otherwise change the tax consequences. From a tax perspective, those who take care of Victoria have no obligation to use that money for her care. From a moral perspective, the right thing to do would be, of course, to use the money for the purposes that the donors intended. Legally, however, it may be nearly impossible to make that happen. While some of the terms of the donations may be governed by GoFundMe's terms & condition, GoFundMe warns potential donors, "Unfortunately there is no way to 100% guarantee that a user’s GoFundMe donation page contains accurate or truthful information. As such, donors should not make payments to any pages or people unless they fully understand and trust the cause presented." Clearly, clawing back the money shouldn't be expected. And gifts made directly to the family? Unless the family voluntary returns any such funds, those funds are likely tough to retrieve.

The unknown is just one of the dangers of donating to causes which haven't been vetted in some way. No matter what you think of the IRS tax exempt organization process right now (a la Lerner), the purposes of the review process and the annual reporting requirements are to help ensure that money gets where donors intend and is used for the purposes donors intend. (For more on charitable giving, click here.) Without any safeguards in place, anyone could claim to have a charitable cause, anyone could solicit money and donors would be none the wiser.

As for the Mullins family, it's true that little Victoria still has a long way to go to get better. Some of those who made initial pledges - including Dr. Stile and Kentucky Fried Chicken - have indicated that their offers of cash and services still stand, irrespective of the final outcome.